JSW Steel makes big push to step up sales

The steelmaker's growing appetite for scale is taking it to foreign shores. The meeting of set targets shows it's looking well-oiled.

FP Editors December 20, 2014 13:41:29 IST
JSW Steel makes big push to step up sales

At the Citi India Investor Conference, JSW wanted to give the impression that the company is on the move; not without reasons.

JSW Steel is out to make a statement. It's looking beyond India to widen its mining operations further. Chile is a case in point, where the company has started mining iron ore and expects sales of 1 million tonnes in FY12 and 2 million tonnes in FY13 - freight on board (FOB) cost $60-63/t.

JSW Steel makes big push to step up sales

Jindal's capacity is seen to go up to 11 million tonnes from 7.8 million tonnes by the first quarter of FY12 and another 2 million tonnes in Karnataka.AFP

The company has already got three out of eight permits for its US coking coal assets and expects to produce 0.5 million tonne in FY12 at an FOB of around $169/tonne. In India, the company has built a 10 mt iron ore benefication capacity and expects to set up another 15 mt unit by FY12.

Jindal's capacity is seen to go up to 11 million tonnes from 7.8 million tonnes by the first quarter of FY12 and another 2 million tonnes in Karnataka with a capex of Rs 2,700 crore by June 2013. The company is done with the expansion of a hot strip mill (HSM) in FY11 and will commission another 1.5 million tonnes by FY12 to enhance its product mix and reduce sale of semis.

As for its Ispat Industries acquisition, the company hopes to achieve synergies such as rationalisation of marketing efforts, sourcing of iron ore, captive availability of pellets/coke and lower cost of power from JSW Energy (vs the grid) for Ispat to help cut costs.

The management is dropping enough hints that it is not getting bogged down by cost pressures and has been able to achieve its targeted volumes over the last few months. It expects EBITDA/tonne for FY11 to be around $170 per tonne.

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